The present invention relates generally to a method and electronic apparatus for classifying large volumes of raw data and, in particular, to a method and electronic apparatus for performing combinatorial bookkeeping.
Many enterprises generate large volumes of data entries, each such entry having associated with it one or more items representing important information. Typically, larger enterprises are computerized and the data entries are inputted into and/or generated by a mainframe computer and then transferred to a mass storage device such as a magnetic tape for later use in various data analysis and report generating programs. For example, a receiving department or a stock room accepts a delivery of parts to be placed into inventory. At least the part number and quantity must be inputted into the computer for later use in inventory, manufacturing and accounting programs.
Various specialized computer programs have been written to organize large volumes of data entries. For example, U.S. Pat. No. 4,346,442 shows a program for processing data entries related to a securities brokerage/cash management system. In U.S. Pat. No. 4,694,397, there is shown a computer system for interfacing a banking system and a brokerage system. U.S. Pat. No. 4,506,326 discloses an apparatus and method for synthesizing a query for accessing a relational database. Of course, there are also many commercial database management programs available today. However, many specific applications have not been addressed.
For example, when transactions are recorded directly into accounts, it is difficult to see the total effect of any one transaction upon an entity by looking at the accounts. Accordingly, the journal or book of original entry was created and is now an integral part of accounting. There appear to be few, if any, formal reports of the journal in the history of accounting. The first level of accounting data, the journal, has received little research attention. To many observers, the journal is merely a log of activity, i.e. the input data from which a ledger is derived. Other than the "debit-credit balance test" and the "does-the-account-exist test", computer systems often leave the completeness and correctness of accounting matters to auditors and accounting supervisors.
Specifically, with respect to combinatorial bookkeeping, a method of bookkeeping wherein the complete journal entry is processed intact in the bookkeeping records, the two forms which are currently being practiced, that is, double-entry and single-entry, are predominantly manual. A number of single-entry methods have been advanced, including methods utilizing adding machines, posting machines, punched cards, carbon-paper systems, and relational database systems. The present invention of electronic bookkeeping applies predominantly to double-entry bookkeeping, but could also apply to single-entry bookkeeping in the sense that single-entry bookkeeping has features which are concurrent with double-entry bookkeeping.
The traditional practice of double-entry bookkeeping requires two inputs, (a) a log of activities known as the journal and (b) a chart of accounts, the list of criteria or attributes to be measured in the process. Output is a classification of financial effects known as the ledger. Entries in the journal must be composed of accounts included in the chart. The records of both the journal and the ledger contain debit and credit divisions. Transactions are analyzed and entered on the journal so that each transaction contains equal debits and credits (in monetary terms).
Single-entry procedures, on the other hand, tabulate a single item. In its ultimate form, single-entry involves a count of each asset and liability with a final balancing item inserted into the financial statements. More often, single-entry procedures tabulate like items, such as cash receipts from collection of customer accounts. These totals are later converted into double-entry records in many systems of accounting. Conversion of single-entry totals to double-entry records is allowable, but not useful in the present system. A third form of single-entry is the tabulation of non-monetary or other information not required by traditional bookkeeping. This third form is incorporated into the present application.
Journal entries are posted to ledger accounts. All of the information contained in the ledger must be available in a journal entry. The posting is a procedure of sorting and copying, i.e., each part (usually one line of several in an entry) is copied to its proper ledger. The result is a ledger which is in sequence and which also balances in total by the debit and credit criterion. The ledger is itself summarized via a procedure known as trial balance.
A number of approaches have been developed to reduce the sorting and copying activity. Special journals have been designed to summarize large numbers of similar transactions such as selling, purchasing, receiving, payroll, and shipping. Often, the special journals appear in single-entry form and the totals are entered into the double-entry system. These special journals have been incomplete and seemingly all systems of account use a general journal for transactions which do not fit the design of the special journals.
Commercial computerized bookkeeping packages are available Which have the ability to trace from one line of a journal entry posted to a specific ledger account to the other postings of that entry. However, no intermediate record of summaries of like journal entries are utilized. The intermediate summaries in the present application create totals for each `event` and simplify both the computer and supervisory processes of bookkeeping.
A frequent assumption of computerized general ledger packages is that specific account debits or account credits are limited to one occurrence per transaction. This policy simplifies audit of the transaction and also simplifies the computer process of transaction backup. The above assumption is likewise incorporated into the present invention.
A second assumption of present computerized generalized ledger packages is that a log of activity is maintained either in transaction backup form or in a detailed sequential, historic file of journal entries. These historic and/or backup files are useful and may be utilized in the present invention when operating in batch mode. Real-time operation of the present system would immediately precede the creation of historic or backup files.
Two schools of thought which are pertinent to and incorporated in the present invention are Matrix Accounting and Computer Science techniques of Sparse Matrix. Although Matrix Accounting has been known since 1846, the concept has been limited to two dimensions, relating to the debit and credit dimensions of the ledger. The present invention incorporates multi-dimension matrices into the logic of the journal and preserves the existing journal feature of balance of debit and credit. Sparse matrix techniques are often introduced in studies of data structures. Their success depends upon (a) a low degree of data fill (most possible occurrence of data are in fact vacant) and (b) the existence of a programming language which can allocate a new design for data storage while the program is operating. Until now, the sparse matrix approach has not been used in accounting.
The difficulties encountered in the prior art discussed hereinabove are substantially eliminated by the present invention.